- IMF maintains 2024 global growth forecast at 3.2%
The Federation Account Allocation Committee has disclosed that the three tiers of government shared a total sum of N1.35 trillion in June.
The amount shared was out of the total sum of N2.48trn revenue generated by various agencies and N150m more than the N1.2trn shared in May.
A statement by the Director of Information and Public Relations, Finance Ministry, Mohammed Manga, on Tuesday said the Federal Government received a total sum of N459.776bn, the States received N461.979bn, the Local Government Councils got N337.019bn.
The Director however didn’t confirm if LGCs administrated by the caretaker committee received statutory allocations as directed by the Supreme Court.
Last week, the Supreme Court ordered the Federal Government to immediately start the direct payment of local government funds to the latter’s exclusive accounts.
The court ordered immediate compliance with the judgement, stating that no state government should be paid monies meant for Local Governments.
The statement read, “The Federation Account Allocation Committee, at its July 2024 meeting chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, shared a total sum of N1,35trn to the three tiers of government as Federation Allocation from a gross total of N2.48trn.
“From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax, Electronic Money Transfer Levy, Exchange Difference, and an Augmentation of N200 Billion, the Federal Government received N459.776 Billion, the States received N461.979 Billion, the Local Government Councils got N337.019 Billion, while the Oil Producing States received N95.598 Billion as Derivation, (13 per cent of Mineral Revenue).”
It added that the sum of N92.11bn was given for the cost of collection, while N1.037bn was allocated for transfer Intervention and refunds.
It said Companies’ Income Tax and Value Added Tax increased significantly, Import and Excise Duties and Electronic Money Transfer levies increased marginally while Petroleum Profit, Royalty Crude, Rentals and Customs External tariff levies recorded considerably decreases.
The sum of N92.11bn was given for the cost of collection, while N1.037bn was allocated for transfer intervention and refunds.
The Communiqué issued by the committee at the end of the meeting indicated that the Gross Revenue available from the Value Added Tax for June 2024 was N562.685bn as against N497.66bn distributed in the preceding month, increasing to N65.020bn.
The Communiqué stated, “From that amount, the sum of N22.507bn was allocated for the cost of collection and the sum of N16.205bn was given for transfers, intervention and refunds.
“The remaining sum of N523.973bn was distributed to the three tiers of government, of which the Federal Government got N78.596bn, the States received N261.987bn and Local Government Councils got N183.39bn.
“Accordingly, the Gross Statutory Revenue of N1.24trn was received for the month. From the stated amount, the sum of N68.95bn was allocated for the cost of collection and a total sum of N1.02trn for transfers, intervention and refunds.
“The remaining balance of N142.514bn was distributed as follows to the three tiers of government: Federal Government got the sum of N48.95bn, States received N24.83bn, the sum of N19.14bn was allocated to LGCs and N49.59bn was given to Derivation Revenue (13 per cent Mineral producing States).
“Also, the sum of N16.35bn from the Electronic Money Transfer Levy was distributed to the three tiers of government as follows: the Federal Government received N2.354bn, States got N7.85bn, Local Government Councils received N5.49bn, while N0.654bn was allocated for the cost of collection.”
The Communiqué also disclosed the sum of N472.19bn from Exchange Difference, which was shared as follows: Federal Government received N224.51bn, States got N113.88bn, the sum of N87.79bn was allocated to Local Government Councils, N46.01bn was given for Derivation (13 per cent of Mineral Revenue).
It further disclosed an Augmentation of N200bn which was shared as follows: the Federal Government got N105.4bn; the States received the sum of N53.44bn, while the sum of N41.200bn was allocated to Local Government Councils.
Companies’ Income Tax and Value Added Tax increased significantly, while Import and Excise Duties and Electronic Money Transfer Levies increased marginally. Petroleum Profit, Royalty Crude, Rentals and Customs External Tariff levies recorded considerable decreases.
According to the Communiqué, the total revenue distributable for the current month of June 2024, was drawn from Statutory Revenue of N142.5bn, Value Added Tax of N523.98bn, N15.69bn from Electronic Money Transfer Levy, N472.19bn from Exchange Difference and Augmentation of N200bn, bringing the total distributable amount for the month to N1.36trn.
“The balance in the Excess Crude Account as of July 2024 stands at $473,754.57,” the Communiqué said.
IMF maintains 2024 global growth forecast at 3.2%
Meanwhile, the International Monetary Fund has held its global growth forecast at 3.2 percent for 2024 in her latest report published on Tuesday.
It however cut the prediction for the United States and Japan, warning of inflation risk and trade tensions ahead.
The IMF expects the world economy to grow 3.2 percent this year, unchanged from its April forecast, according to its World Economic Outlook update.
“Global activity and world trade firmed up at the turn of the year, with trade spurred by strong exports from Asia, particularly in the technology sector,” said the fund.
For 2025, it expects global growth of 3.3 percent.
But even as many countries saw better growth than anticipated in the first three months this year, the IMF flagged what it called notable surprises in Japan and the United States.
The Washington-based lender also cautioned that upside risks to inflation have increased, with services prices holding up disinflation.
This increases the prospect of interest rates staying elevated for longer, “in the context of escalating trade tensions and increased policy uncertainty.”
An area of concern is trade and industrial policy, with countries potentially adopting measures that impact the global economy’s integration, said IMF chief economist Pierre-Olivier Gourinchas.
Asked if risk assessments have shifted after the attempted assassination of former US President Donald Trump, the Republican Party’s nominee in November’s election, Gourinchas noted the fund will consider its implications.
While world growth appears stable, the IMF has lowered projections for the United States and Japan.
US growth in 2024 was downgraded to 2.6 percent, 0.1 percentage points below April’s forecast, due to a “slower-than-expected start to the year,” said the fund.
Japan’s economy was seen expanding 0.2 percentage points less than expected, by 0.7 percent this year.
This was mainly thanks to temporary supply disruptions and weak private investment in the first quarter.
The euro area meanwhile is showing signs of recovery, with relatively strong services activity, Gourinchas said, although manufacturing shows weakness.
China and India are expected to power activity in Asia — with China’s 2024 forecast revised up to 5.0 percent on a private consumption rebound and strong exports.
Meanwhile, India is set to grow 7.0 percent, partly on better prospects for consumption.
Gourinchas also flagged risks to China stemming from weak confidence and unresolved property sector problems.
Should domestic demand weaken, China would rely more on the external sector — a situation that countries like the United States are pushing back against.
There also remain risks of sticky inflation amid renewed trade or geopolitical tensions, the IMF cautioned, even as it expects inflation to return to target by end-2025.
Wage growth, if accompanied by weak productivity, could make it tough for firms to ease price increases.
An escalation of trade tensions could also raise near-term inflation risks, by lifting costs of imported goods, IMF said.
Higher inflation could heighten the chances that interest rates stay elevated for longer, increasing financial risks.
The IMF called for careful monetary policy adjustments.
A resurgence of tariffs can also trigger retaliation and a “costly race to the bottom,” said the report.
Another source of uncertainty is the chance of “significant swings in economic policy as a result of elections this year, with negative spillovers to the rest of the world.”
